Barometer gauges chop significant portion of gains

In the dilly-dallying session of trade, Indian equity markets have now swirled out of intra-day’s high level, scaled in the afternoon deals tracing the sanguine European leads. Although European counterparts, continue to trade strength from strength, however, volatility, a trait peculiarly seen in the F&O expiry week, continues to dominate Dalal Street.

Following a stronger showing in Asia where the spotlight fell on the possibility of further policy stimulus in China, European equities too rose as investors shifted their focus on US home price and consumer confidence data, which is expected to signal the world's top economy is coming back on track.

Back on the home turf, gains in barometer gauges have subsided to mere 0.30%. 30 scrip sensitive index - Sensex, is off its 16,500 psychological level, while 50 share index - Nifty, too is trading sub 5,000 crucial fortress. Further, profit booking is too being witnessed across broader space, with Midcap and Smallcap index losing most portion of its gains. Stocks from Information Technology, Realty and Technology are featuring the most on investor’s radar, while stocks from Consumer Durable and defensive- Fast Moving Consumer Goods (FMCG) and Health Care (HC) space, continue to remain the dark spot.

The BSE Sensex is currently trading at 16,459.79, up by 42.95 points or 0.26% after trading as high as 16,544.38 and as low as 16,410.23. There were 18 stocks advancing against 12 declines on the index.

The broader indices too trimmed gains; the BSE Mid cap index rose 0.02% and Small cap index gained 0.20%.

On the BSE sectoral space, Information Technology (IT) up 1.01%, Realty up by 0.84%, TECk up 0.68%, Public Sector Undertaking (PSU) up by 0.52% and Auto up 0.49% were the major gainers, while Consumer Durables (CD) down 0.81%, Fast Moving Capital Goods (FMCG) down 0.66% and Health Care (HC) down by 0.15% were the only laggards in the space.

Coal India up by 1.92%, Maruti Suzuki up 1.76%, Wipro up 1.28%, ONGC up 1.14% and Tata Motors up 1.12% were the major gainers on the Sensex, while ITC down 1.21%, Hindalco Industries down by 0.52%, Bajaj Auto down by 0.51%, DLF down by 0.50% and Bharti Airtel down 0.36% were the major losers in the index.

Meanwhile, the finance ministry is planning to organize road-shows in five Gulf nations, together with Kuwait and the UAE from June 10-15, in a move to attract investments from foreign retail investors in equity and bond markets. The move comes on the back of considerable foreign capital outflows from the domestic equity market and lack of investors’ interest in the corporate bond market.

In order to increase foreign investments into corporate bonds, the ministry is also working on various measures, as Foreign Institutional Investors (FIIs) limits set for investment into these instruments was almost exhausted in the last fiscal. The FIIs can invest up to $20 billion in corporate bonds and $15 billion in government securities (G-secs). It is also projected that over the next 2 years QFIs would invest around $50-75 billion in the country's equity and bond markets.

Finance Minister Pranab Mukherjee in the Union Budget 2012-13, had announced opening up of corporate bond market for QFIs. The government earlier on January 1, 2012, had permitted QFIs to directly invest in Indian equity market in order to widen the class of investors, attract more foreign funds, and reduce market volatility and to deepen the Indian capital market. Further, pursuant to the budget announcement 2011-12, QFIs have been already allowed to have direct access to Indian Mutual Funds schemes.

A Qualified Foreign Investors (OFIs) is an individual, group or association resident in a foreign country that is acquiescent with Financial Action Task Force (FATF) standards. QFIs do not include FIIs/sub-accounts. Permitting QFIs to directly invest in the Indian equity and bond markets would broaden the non-resident investor base in capital markets and increase the set of non-resident portfolio investors.

The S&P CNX Nifty is currently trading at 4,994.75, up by 9.10 points or 0.18% after trading as high as 5,020.15 and as low as 4,982.30. There were 27 stocks advancing against 23 declines on the index.

The top gainers on the Nifty were HCL Tech up 2.65%, Cairn up 2.51%, Maruti up 1.86%, Coal India up 1.84% and Ranbaxy up 1.53%.

BPCL down 2.86%, IDFC down 1.93%, Reliance Infra down 1.42%, ACC down 1.41% and ITC down 1.30% were the major losers on the index.

In the Asian space, Shanghai Composite surged 1.20%, Hang Seng soared 1.35%, KLSE Composite inched up 0.67%, Nikkei 225 climbed 0.74%, Straits Times Index advanced 0.61%, KOSPI Composite Index jumped 1.41% and Taiwan Weighted spurted 2.89%, while Jakarta Composite also entered the positive zone and was trading above 0.01%.

The European markets got off to a positive start as France’s CAC 40 climbed 0.35%, Germany’s DAX gained 0.60% and United Kingdom’s FTSE rose 0.23%.